By: Nicholas Williamson on April 7th, 2021
What Are IDIQ Contracts?
Contracts | 5 Min Read
You might have run across the terms “IDIQ” or “Indefinite Delivery, Indefinite Quantity” when researching options to sell your solutions to the government through the GSA Multiple Award Schedule (MAS) Program. It might just seem like another government contracting acronym to you, but it’s a crucial term to remember.
So what are IDIQs? Indefinite Delivery, Indefinite Quantity (IDIQ) contracts were created to help streamline the procurement process and speed-up delivery. All GSA Schedule contracts are IDIQ, so if you are a prospective or current GSA contractor, you should understand how they work.
Here’s what you need to know about these contracts.
What Are IDIQ Contracts?
IDIQs are Indefinite Delivery, Indefinite Quantity contract vehicles that provide an indefinite quantity of products or services for a fixed time. They are used when GSA can’t determine, above a specified minimum, the exact quantities of supplies or services that the government will need during the contract period.
To establish an IDIQ, Contracting Officers (COs) need to determine a minimum quantity, a reasonable maximum quantity, a fixed time period, and a Statement of Work (SOW). Although the term “indefinite” is used, reasonable thresholds are still established for contractors.
In the federal contracting world, there are many different contract vehicles that use IDIQ contracts. Some of the most popular IDIQ contracting vehicles are:
Types of IDIQ Contracts
The first type of IDIQ contract is a single-award IDIQ. A single-award IDIQ may be established and awarded to a single contractor. The base contract has no funding associated with it, and it lays out the terms and conditions and pricing applicable to any orders placed against the base contract. It’s important to note that GSA Schedule contracts are not single-award IDIQs.
There are some pros to single-award IDIQs such as:
- The ability to establish set prices for products and services with single vendor significantly reduces procurement lead time at the ordering level.
- A single vendor solution reduces burden on government to perform integration function.
- The ability to offer agency wide ordering through an established IDIQ increases flexibility to meet various or mission needs quickly.
- The ability to establish streamlined ordering procedures for future requirements reduces lead time to award.
However, there are also some disadvantages to single-award IDIQs such as:
- An award to a single vendor increases potential for vendor lock, meaning the agency may have to continue using the product or service until the contract period ends.
- An award to a single vendor increases risk to cost, schedule, and performance risk if vendor is under-performing.
- The processes to establish the IDIQ contract traditionally have long procurement lead time to award.
The second type of IDIQ is the multiple-award IDIQ. These are the most common type of IDIQ contracts and the type of contract vehicle that GSA Schedule contractors have.
A multiple-award IDIQ may be established and awarded to multiple vendors. When the need arises to place orders against the multiple-award contract, all awardees holding a base contract are requested to submit a proposal to provide each contractor a fair opportunity to be considered for each order.
There are some pros to multiple-award IDIQs such as:
- The ability to establish unique contract terms and conditions increases flexibility for all types of acquisition programs.
- Continuous competition reduces risk for vendor lock and keeps pressure on pricing.
- Fair opportunity enables selection of best of breed solutions.
- The ability to offer agency wide ordering through an established IDIQ increases the flexibility to meet various mission needs quickly.
- The ability to establish streamlined ordering procedures for future requirements provides opportunities to reduce procurement lead time.
However, there are some disadvantages to multiple-award IDIQs such as:
- The fair opportunity requirement increases lead time to award with evaluations at the ordering level.
- Fair opportunity orders above FAR threshold can be challenged with bid protests.
- Multiple-award IDIQs can increase administrative cost and contract management complexity.
- The processes to establish IDIQ traditionally have aa long procurement lead time to award.
Recent Updates to IDIQ Guidelines
There have been some recent changes to what IDIQ means to the Department of Defense (DoD), GSA, and NASA.
In August 2020, the Federal Acquisition Regulation (FAR) was updated to implement Section 825 of the Fiscal Year 2017 National Defense Authorization Act (NDAA), amending 10 U.S.C. 2305(a)(3). This modified the requirement to consider price or cost as an evaluation factor for the award of certain multiple-award task-order contracts.
Section 825 states that at the government’s discretion, solicitations for multiple-award contracts that will be awarded for the same or similar services AND state the government intends to award a contract to each qualifying offeror, do not require price or cost as an evaluation factor for contract award. When price or cost is not evaluated during contract award, the Contracting Officer shall consider price or cost as a factor for each order under the contract.
Benefits of Having an IDIQ Contract
IDIQs are popular among federal government agencies because they streamline the procurement process. Sometimes agencies have frequent needs for a product or service, but they aren’t sure how much they need or for how long.
IDIQs save time because a contract isn’t needed to place every single task or delivery order. IDIQs also save money because they eliminate the need for multiple bidding processes. This makes them valuable for both government agencies and government contractors.
If you are looking into acquiring a GSA Schedule, you should take advantage of this position in the federal marketplace. Not only are IDIQs often preferred by government customers, but the GSA MAS Program is the largest and most active of the IDIQ contracts.
Are You Interested in Getting a GSA Schedule?
If you are looking to acquire a GSA Schedule, we have some resources to help you get started. First, you’ll want to check out the requirements to get on a GSA Schedule and the GSA Schedule acquisition process. Next, you’ll want to read up on how to become a GSA Schedule contractor.
If you have any questions about the process or if you need help getting a GSA Schedule, one of our consultants is here to assist you. You can also check out our blog or our monthly newsletters for more government contracting insights.